The Finnish mobile giant announced profits of Euro 1.13bn (Pounds 695m), compared to a bottom-line of Euro 1.44bn (Pounds 886m) for the first three months of the year.
This was despite a 5% increase in net sales to Euro 7.34bn (Pounds 4.51bn). But mobile phone sales fell sharply in the quarter to under a billion euros, a drop of 27%.
Last week, Nokia warned second-quarter sales would not meet expectations. It said it did not expect sales to pick up until sometime in autumn.
The company blamed the slowdown on US economic meltdown, which has spread to Europe and was affecting the telecoms market in particurlar. In recent weeks Australia’s One.Tel network has gone into administration, while the fiasco at Marconi has been well publicised.
But Nokia’s earnings per share were not as bad were earlier predicted. EPS fell 14% to 18 cents, well below a forecasted 25% drop.
Jorma Ollila, the Nokia chairman and CEO, remained upbeat and praised the company’s ability to manage working capital and control to retain its ‘leading market position’.
‘We believe firmly in the long-term opportunities of the mobile communications industry,’ he said, adding that Nokia’s strong brand would continue to -translate very well into profitable future growth’.
Nokia shares were last trading 2.6% down at $17. The stock has declined steadily since the end of last month, following negative market sentiment about the mobile telecom market. Three weeks ago, Nokia shares were valued at more than $23.
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